- Associated Press - Wednesday, March 5, 2014

LITTLE ROCK, Ark. (AP) - Arkansas lawmakers began crafting legislation outlining the state’s $5 billion budget on Wednesday, but divisions remained on more than $83 million in requests to tap the state surplus for various one-time needs.

A day after resolving a fight over the state’s compromise Medicaid expansion, legislative leaders and Democratic Gov. Mike Beebe met privately throughout the day to negotiate details of the budget plan. Top legislative leaders from both chambers have said there are few disputes among lawmakers concerning Beebe’s budget.

“There’s really not a whole lot of disagreements at this point, so I think it will go pretty smooth,” said House Speaker Davy Carter, R-Cabot.

Under Beebe’s proposed budget, Arkansas’ public schools and prisons would get a boost in funding. His proposal calls for $105.8 million in additional spending, with $65 million going toward the state’s public schools. He has proposed increases in funding for prison systems to address crowding as a result of the state overhauling its probation policies.

The budget talks, however, focused primarily on whether proposals funded by surplus money should be approved, according to Sen. Larry Teague, D-Nashville, co-chairman of the Joint Budget Committee.

“There are people who don’t want to spend any of it, and people that want to spend most of it,” Teague said. “We need to figure out something that will pass.”

The state’s projected surplus is about $126 million, said Brandon Sharp, the budget director for the state’s Department of Finance and Administration.

Beebe and lawmakers are seeking about $83.3 million in various proposals from that surplus. The proposals include building improvements to the state’s human development centers, payment for holiday hours to the state’s Department of Correction employees and matching grants to school districts for high-speed internet access.

Beebe said it is unlikely that many of those proposals will garner enough support to be fully funded.

“There’s nothing even close to that in my opinion that will be approved,” he said. “Even on our own supplementals… we can maybe kind of pare back a little bit.”

Carter said he’d like to avoid tapping into the surplus, saying the money may be needed later.

“There’s a lot of good causes out there on these surplus bills that are filed, but it’s just how much of that money do we want to spend,” Carter said. “I like having that money kind of tucked under our pillow for emergencies.”

Senate President Michael Lamoureux, R-Russellville, acknowledged value in some of the proposals but said lawmakers need to pare them down to what are truly statewide needs.

“There are some valid requests and some things we need to do,” he said. “There are no requests that are untouchable. That does include the administration’s requests, but I do think the administration’s requests all at least cross the threshold of being valid administration requests. They’re not independent projects or for particular localities or small in nature.”

Teague said he hopes the state’s budget bill will arrive in the Joint Budget Committee by Thursday, which would allow lawmakers to vote on the legislation next week.

“We’ll work it out,” Teague said. “We always do.”

The state’s budget bill, also referred to as the Revenue Stabilization Act, is the last measure considered by lawmakers before a legislative session adjourns. The legislation sets spending priorities based on expected revenue.

It’s a signal that the fiscal session that opened in February is winding down. On Tuesday the House gave final approval to reauthorizing the state’s “private option” plan to use federal Medicaid funds to purchase private insurance for the poor.

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